Moves were modest with Japan’s Nikkei off 0.3 per cent in thin trade, while EMini futures for the S&P 500 edged up 0.05 per cent.

The yuan reached its highest in a week at 6.8512 per dollar as Beijing acted to prevent a test of the psychologically important 7.0000 level.

Investors were also encouraged by news China and the United States will hold lower-level trade talks this month, offering hope that they might resolve an escalating tariff war.

Reports suggested the talks in Washington would take place on August 21 and 22, just before $16 billion in new US tariffs on Chinese goods take effect.

The US Trade Representative’s office said on Friday it doubled the length of tariff hearings on the next $200 billion worth of Chinese goods to six days from the previously planned three due to overwhelming demand from companies to testify.

The hearings will be held Aug. 20-24 and on August 27.

Dealers cited speculation the talks could set the stage for a summit between US President Donald Trump and Chinese President Xi Jinping in November.

“Although such a timeline for agreement is totally unrealistic given how far apart the two sides are, the positive headlines should help sentiment to improve and a positioning unwind of USD is possible,” said analysts at JPMorgan.

“This would set EM Asia equities up for a short term squeeze, with HK/China yuan sensitives likely leading the way higher.”

Steady for now

Helping the general mood was a steadying in the Turkish lira, which was holding around 6.0000 per dollar on Monday.

Qatar and Turkey’s central banks have signed a currency swap to provide liquidity and support for financial stability, Qatar’s central bank said on Sunday.

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